Startup India is an Indian Government initiative that is intended to build a strong eco-system for nurturing innovation and startups in the country to drive sustainable economic growth and generate large scale employment opportunities. Through this initiative, the government aims to empower Startups to grow through innovation and design.
The objectives of the Startup India Movement are outlined below. The action plan envisages supporting the startups and more:
- Enhanced infrastructure, including incubation centres
- IPR facilitation, including easier patent filing
- The better regulatory environment, including the tax benefits, easier compliance, improved setting up of a company, fastest mechanism and more.
- A goal to increase the funding opportunities
- Provide a vast networking database for the entrepreneurs and other stakeholders in the startup ecosystem.
Eligibility Criteria
The startup must meet the following eligibility criteria to avail the DPIIT Certificate of Recognition:
- Period of Existence of Entity: The Period of existence and operations of the company should not exceed 10 years from the date of formation
- Type of Entity: The DPIIT Certificate of Recognition is provided for the company which is incorporated as a Private Limited Company, a Limited Liability Partnership (LLP) or a Registered Partnership Firm.
- Annual Turnover: To get the DPIIT Certificate of Recognition, The firm should have an annual turnover of Rs. 100 crore for any of the fiscal years since its federation
- Original Entity: To avail the DPIIT Certificate of Recognition, the company should not have been incorporated by splitting up or recreating an already existing entity.
- Innovative & Scalable Entity: The entity should be working towards development or improvement of a product, process or service.
- The entity should have a scalable business model with high potential for the creation of wealth and employment. The firm should have the potential to generate employment or create wealth.
Procedure to get DPIIT Certificate
The entity should follow the below-mentioned simple steps to get the DPIIT certificate of recognition.
Incorporation of the Business
As stated above, the entity must first incorporate the business as a Private Limited Company or a Partnership firm or a Limited Liability Partnership (LLP).
Get in touch with IndiaFilings.Com to register your company.
Registering Business with the Startup India Scheme
The business needs to be registered with the Startup India Scheme to get the DPIIT certificate of recognition.
Apply for Start-up Recognition
The applicant unit need to access the Start-up India Recognition portal for Register with Start-up India to get the DPIIT Certificate of Recognition for Startups.
Provide the following details in the Start-up Recognition application :
- Entity Details: Nature of Entity, Industry, Sector, Categories and Company Incorporation Number and Registration Date
- Full Address of the Entity
- Details of the Authorized Representative
- Directors or Partner Details
- Details of Intellectual Property Right
- Details of funding
- Recognition received by the entity
Get the Startup Recognition Number
The DPIIT Certificate of Recognition for Startups will be issued after examination of the application and documents submitted.
Once the ministry approves the application and provides the unique startup recognition number, the startup can be registered with tax benefits.
Benefits for DPIIT Recognized Startups
The startups can avail the following benefits after obtaining the DPIIT Certificate of Recognition for Startups:
Self Certification
After obtaining the DPIIT Certificate of Recognition for Startups, the entity will be allowed to self-certify compliance under 3 Environmental Laws and 6 Labour Laws.
Start-Up Patent Application
The DPIIT recognized startups are required to pay only 80% of the fees on Patents, trademark, copyrights and design, and the fast-tracking of a patent application will be available for startups.
Easier Public Procurement Norms
- The DPIIT recognized startups will get an opportunity to list the product on Government e-Marketplace.
- DPIIT recognized startups are exempted from submitting Earnest Money Deposit
- Exemption from Prior Experience/Turnover is provided for Start-ups in all Central Government ministries and departments.
Easy winding up of Company
According to the Insolvency and Bankruptcy Code, 2016, the company can be wound up within 90 days of applying for insolvency
Funds of Funds
The startups will be eligible for Rs.10000 crore funds of funds from the Alternative Investment Funds.
Credit Guarantee fund
The startups can avail Rs.2000 crore Credit Guarantee fund through the National Credit Guarantee Trust Company or SIDBI over 4 years
Tax Exemptions
- After obtaining the Certificate of Recognition, the startup can apply for Tax exemption under section 80 IAC of the Income Tax Act.
- The DPIIT recognized startups can apply for Angel Tax Exemption.
- After obtaining the clearance for Tax exemption, the DPIIT recognized startups are exempted from income tax for 3 consecutive fiscal years out of its first ten years since formation.
Know more about the Startup Tax Exemption under Startup India Initiative
Check Business Name Availability
Find if business name can be registered with MCA in India
To register a company in India, the first step is to obtain name approval for the business from the Ministry of Corporate Affairs (MCA). This process takes about 24-48 hours. A private limited company name in India must end with the words private limited. One Person Company ends with (OPC) private limited. LLP end with LLP and Section 8 companies can end with words like foundation, association or institution.
A company name proposed to be registered cannot be identical or similar to an existing company name. Also, every company name must include a word that denotes the activity undertaken. For example, in VERVE Financial Services Private Limited – Financial Services denote the activity undertaken. Check Business Name Availability
Proprietorship vs Limited Liability Partnership (LLP) vs Company
| Features | Proprietorship | Partnership | LLP | Company |
|---|---|---|---|---|
| Definition | Unregistered type of business entity managed by one single person | A formal agreement between two or more parties to manage and operate a business | A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. | Registered type of entity with limited liability to the owners and shareholders |
| Ownership | Sole Ownership | Min 2 PartnersMax 50 Partners | Designated Partners | Min 2 DirectorsMin 2 ShareholdersMax 15 DirectorsMax 200 ShareholdersFor One Person Company1 Director1 Nominee Director |
| Registration Time | 7-9 working days | |||
| Promoter Liability | Unlimited Liability | Limited Liability | ||
| Documentation | MSMEGST Registration | Partnership Deed | LLP DeedIncorporation Certificate | MOAAOAIncorporation Certificate |
| Governance | – | Under Partnership Act | LLP Act, 2008 | Under Companies Act,2013 |
| Transferability | Non Transferable | Transferable if registered under ROF | Transferable | |
| Compliance Requirements | Income tax filing if turnover is more than Rs.2.5 lakhs | ITR 5 | Form 11Form 8ITR 5 | ITR 6MCA filingAuditor’sappointmentKnow More |
Startup India FAQ’s
Who is eligible for Startup India?
To register with Startup India, an entity must meet specific criteria.
- Applicants must be Indian citizens aged 18 or older.
- It is recommended that the date of incorporation of the company be at least ten years old.
- The Company should have been incorporated as a Partnership Firm, Private Limited Company, or a Limited Liability Partnership (LLP)
- A company’s annual turnover should not exceed Rs.100 crore in any financial year since incorporation.
- The Company or Entity should have been formed initially by the promoters and not by splitting up or reconstructing an existing business.
- The startup should have a plan for developing or improving a product, process, or service and have a scalable business model with a high potential for creating wealth & employment.
- Companies working towards developing a new product or service can avail of benefits under the Startup-is India policy.
Is Startup India a scheme?
Startup India is a vital government scheme launched on 16th January 2016 to provide financial assistance and mentorship to entrepreneurs. Additionally, it provides entrepreneurs with a platform for networking with industry experts, investors, and other stakeholders. The scheme also encourages research, development, and technology transfer in the country. This scheme helps create more jobs in the country and boost economic growth.
Does the government give funds to startups?
The easy availability of financing is a critical issue for entrepreneurs looking to expand their Startups. Due to a lack of funding, many business concepts stay on the ground. To address this issue, the Indian government has established a few Schemes through which the government provides financial aid to entrepreneurs. Startups can use these funds for research and development, marketing, and other activities to help them grow their business.
Can a One Person Company get Startup India Recognition?
As One Person Company is a form of a company it can be recognized as a Startup.
How many days are required to obtain the Startup India Recognition Certificate?
It requires around 7-10 working days , the government officers check all the information and the documents that are provided.
For how many years an entity get the recognition of startup?
For the period of 10 years from the date of incorporation up to the turnover the increases the limit of Rs.100 crore in any financial year.
How to connect with other startups and investors after getting the Startup recognition?
Once the registration is done you can connect to the other startups, the investors or the incubators on the startup India portal.
Can the tax benefits availed as soon as the certificate is obtained?
After registering under this scheme the entity will be eligible to avail certain tax benefits, but one has to apply seperately on the portal to avail it.
What is Startup India recognition?
The companies are eligible to get recognized as DPIIT Department of Industrial policy and Promotion which gives access to tax benefits, easier compliances, IPR fast tracking and more.
Who can get Startup India Registration?
Private Limited Companies, Limited Liability Partnerships, Registered Partnership firms can obtain Startup recognition certificate.
What is DPIIT?
Department for Promotion of Industry and Internal Trade grants the startup recognition certificate based on certain conditions.